UAW raises strike pay ahead of Detroit 3 talks. What it means
The ability to strike is a union's best weapon and the UAW is stocking its arsenal.
On Tuesday, the UAW said its executive board increased the weekly strike pay for members from $275 per week to $400 per week. The weekly benefits still begin on the eighth day of a strike.
Additionally, the UAW eliminated a provision that prevented a member from receiving UAW strike benefits if the member received unemployment benefits.
"Our striking members and their families deserve our solidarity, and this increased benefit will help them hold the line," said Ray Curry, UAW president, in a statement.
Experts said the move is significant, but still short of firing a shot across the bow.
The contract talks with the Detroit 3 automakers are a year away. The current contract expires in September 2023. But the strike pay hike still signals that the union is "positioning themselves for what they think might be a difficult round of negotiations with the Detroit 3," said Marick Masters, a business professor at Wayne State University.
Still, nothing is imminent.
"If they were doing this one week before a strike deadline, then you could say they're signaling something," Masters said. "But this far in advance, they're laying the groundwork for the future."
The UAW learned from the 40-day strike against General Motors in 2019 that the union's strike benefits were insufficient, Masters said. The union was paying the 48,000 strikers $250 a week. By the fifth week of the strike, the union raised the pay to $275 a week and allowed members to take part-time jobs.
Still, it is a big blow to the budget to live on strike pay. The starting wage for hourly plant workers is $16 to $31 an hour. That's about $640 to $1,240 a week, before taxes and any overtime pay. A strike payment under $600 is not taxed, according to the union. It is paid out of the UAW’s strike fund, which as of March totaled $826 million, said UAW spokeswoman Sandra Engle.
The boost in strike pay to $400 is equal to $10 an hour.
"So that's not a replacement for what an autoworker makes, but it is more significant," said Harley Shaiken, professor emeritus at the University of California, Berkeley, who is an expert on labor issues. "Now that we have more significant inflation, this is essentially meant for the union to be prepared."
Many unions don't have a strike fund, Shaiken said. So keeping the UAW's fund well funded and strong shows that it is prepared to fight.
"Unions have learned over the years that the best way to avoid a strike is to be prepared to have one," Shaiken said. "It's not indicative that we're closer to a strike, but it doesn't indicate that we're further away from one. This indicates, not that the union wants to strike, but that it's prepared to strike and that sends a signal."
But another expert says the strike pay increase is more likely a sign of the times.
"It's another sign of the rampant inflation," said Erik Gordon, a professor at the University of Michigan Ross School of Business. "If someone is out on strike they still pay more for bread and milk and for their power bill. When they do have a walkout, because sooner or later you have walkouts, the strike pay will come a little closer to reflecting the cost of living."
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Contact Jamie L. LaReau jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.
This article originally appeared on Detroit Free Press: UAW raises strike pay ahead of Detroit 3 auto talks
